Åland comprises Fasta Åland ("Main Island", on which 90% of the population resides)[6] and a further 6,500 skerries and islands to its east. Fasta Åland is separated from the coast of Sweden by 38 kilometres (24 mi) of open water to the west. In the east, the Åland archipelago is contiguous with the Finnish Archipelago Sea. Åland's only land border is located on the uninhabited skerry of Märket,[7] which it shares with Sweden.

Åland's autonomous status means that those provincial powers normally exercised by representatives of the central Finnish government are largely exercised by its own government.

The autonomous status of the islands was affirmed by a decision made by the League of Nations in 1921 following the Åland crisis. It was reaffirmed within the treaty admitting Finland to the European Union. By law, Åland is politically neutral and entirely demilitarised, and residents are exempt from conscription to the Finnish Defence Forces. The islands were granted extensive autonomy by the Parliament of Finland in the Act on the Autonomy of Åland of 1920, which was later replaced by new legislation by the same name in 1951 and 1991.[8] Åland remains exclusively Swedish-speaking by law.

In connection with Finland's admission to the European Union, a protocol was signed concerning the Åland Islands that stipulates, among other things, that provisions of the European Community Treaty shall not force a change of the existing restrictions for foreigners (i.e., persons who do not enjoy "home region rights" (hembygdsrätt) in Åland) to acquire and hold real property or to provide certain services.

Åland's original name was in Proto-Norse language *Ahvaland which means "Land of Water". In Swedish, this first developed into Áland and eventually into Åland, literally "river land"—even though rivers are not a prominent feature of Åland's geography. The Finnish name of the island, Ahvenanmaa ("perch land"), is seen to preserve another form of the old name.[9]

Another theory suggests that the Finnish Ahvenanmaa would be the original name of the archipelago, from which the Swedish Åland derives.[10]

The official name, Landskapet Åland, means "the Region of Åland"; landskap is cognate to English "landscape".

During this process, Sweden failed to secure a provision that the islands not be fortified. The issue was important not only for Sweden but also for the United Kingdom, which was concerned that a military presence on the islands could threaten Britain's military and commercial interests.

In 1832, Russia started to fortify the islands with the great fortress of Bomarsund. A combined British and French force of warships and marines captured and destroyed the fortress in 1854 as part of the campaign in the Baltic during the Crimean War. The 1856 Treaty of Paris demilitarized the entire Åland Islands archipelago.

During the Finnish Civil War, in 1918, Swedish troops intervened as a peacekeeping force between the Russian troops stationed on the islands and "White" and "Red" Finnish troops who came from Finland over the frozen sea. (Historians point out that Sweden may have in reality planned to occupy the islands.) Within weeks, the Swedish troops gave way to German troops who occupied Åland by request of the "White" (conservative) Senate of Finland.

Åland (blue) with historical and modern provinces of Finland (yellow) juxtaposed.

After 1917 the residents of the islands worked towards having them ceded to Sweden. In 1919 a petition for secession from Finland and integration with Sweden was signed by 96.4% of the voters on the islands, with over 95% in favour,[11] although serious questions later arose regarding this extraordinarily high figure.[citation needed] Swedish nationalist sentiments had grown strong particularly as a result of the anti-Swedish tendencies in Finland and Finnish nationalism fueled by Finland's struggle to retain its autonomy and resistance against Russification. The conflict between the Swedish-speaking minority and the Finnish-speaking majority on the mainland, prominent in Finnish politics since the 1840s, contributed to the apprehension of the Åland population about its future in Finland.

Finland, however, declined to cede the islands and instead offered them an autonomous status. Nevertheless the residents did not approve the offer, and the dispute over the islands was submitted to the League of Nations. The latter decided that Finland should retain sovereignty over the province but that the Åland Islands should be made an autonomous territory. Thus Finland was obliged to ensure the residents of the Åland Islands the right to maintain the Swedish language, as well as their own culture and local traditions. At the same time, an international treaty established the neutral status of Åland, prohibiting the placing of military installations or forces on the islands.

In the course of the 20th century, increasing numbers of the islanders have perceived Finnish sovereignty as benevolent and even beneficial.[citation needed] The combination of disappointment about insufficient support from Sweden in the League of Nations, Swedish disrespect for Åland's demilitarized status in the 1930s, and some feelings of a shared destiny with Finland during and after World War II has changed the islanders' perception of Åland's relation to Finland from "a Swedish province in Finnish possession" to "an autonomous part of Finland".[citation needed] The islanders enjoyed safety at sea during World War II, as their merchant fleet sailed for both the Allied countries and Germany. Consequently Åland shipping was not generally attacked as each side rarely knew which cargo was being carried to whom.

Finland marked the 150th anniversary of demilitarisation of the Åland Islands by issuing a high-value commemorative coin, the €5 150th Anniversary of Demilitarisation of Åland Islands commemorative coin, minted in 2006. The obverse depicts a pine tree, very typical in the Åland Islands. The reverse design features a boat's stern and rudder, with a dove perched on the tiller, a symbol of 150 years of peace.

The Åland Islands are governed according to the Act on the Autonomy of Åland and international treaties. These laws guarantee the islands' autonomy from Finland, which has ultimate sovereignty over them, as well as a demilitarized status. The Government of Åland, or Landskapsregering, answers to the Parliament of Åland, or Lagting, in accordance with the principles of parliamentarism.

Åland has its own flag, has issued its own postage stamps since 1984, runs its own police force, and is a member of the Nordic Council. Since 2005 the Åland Islands also have had their own airline, Air Åland. The islands are demilitarised, and the population is exempt from conscription. Although Åland's autonomy preceded the creation of the regions of Finland, the autonomous government of Åland also has responsibility for the functions undertaken by Finland's regional councils. Åland is a member of the Small European Postal Administration Cooperation. The islands are considered to be a separate "entity" for amateur radio purposes and have their own callsignprefix granted by Finland, OHØ.

Home Education has effectively been banned by the Swedish government in 2011, but is allowed by the Finnish government. Due to the island's close proximity to Sweden and because the island is Swedish speaking, a number of Swedish homeschooling families have moved from the Swedish mainland to Åland, including Jonas Himmelstrand, the chairman of the Swedish association for homeschooling.

The State Department of Åland represents the Finnish central government and performs many administrative duties. It has a somewhat different function from the other Regional Administrative Agencies, owing to its autonomy. Prior to 2010, the state administration was handled by the Åland State Provincial Office.

Åland has its own postal administration but still uses the Finnish five-digit postal code system, using the number range 22000-22999, with the prefix AX. The lowest numbered postal code is for the capital Mariehamn, AX 22100, and the highest AX 22950 for Jurmo.

The Åland Islands occupy a position of strategic importance, as they command one of the entrances to the port of Stockholm, as well as the approaches to the Gulf of Bothnia, in addition to being situated near the Gulf of Finland.

The Åland archipelago consists of nearly three hundred habitable islands, of which about eighty are inhabited; the remainder are merely some 6,000 skerries and desolate rocks. The archipelago is connected to Åboland archipelago in the east (Finnish: Turunmaan saaristo, Swedish: Åbolands skärgård)—the archipelago adjacent to the southwest coast of Finland. Together they form the Archipelago Sea. To West from Åland is Sea of Åland and to North the Bothnian Sea.

The surface of the islands is generally rocky and the soil thin. There are several harbours.

The islands' landmass occupies a total area of 1,527 square kilometres (590 sq mi). Ninety per cent of the population live on Fasta Åland (the Main Island), which is also the site of the capital town of Mariehamn. Fasta Åland is the largest island in the archipelago, extending over 1,010 km2 (390 sq mi), more than 66% of the province's land area. It measures approximately 47 kilometres (29 mi) from north to south and 34 kilometres (21 mi) from east to west.

During the Åland Crisis, the parties sought support from different maps of the islands. On the Swedish map, the most densely populated main island dominated, and many skerries were left out. On the Finnish map, a lot of smaller islands or skerries were, for technical reasons, given a slightly exaggerated size. The Swedish map made the islands appear to be closer to the mainland of Sweden than to Finland; the Finnish map stressed the continuity of the archipelago between the main island and mainland Finland, while a greater gap appeared between the islands and the archipelago on the Swedish side. One consequence is the oft-repeated number of "over 6,000" skerries that was given authority by the outcome of the arbitration.

Åland's economy is heavily dominated by shipping, trade and tourism. Shipping represents about 40% of the economy, with several international carriers owned and operated off Åland. Most companies aside from shipping are small, with fewer than ten employees. Farming and fishing are important in combination with the food industry. A few high-profile technology companies contribute to a prosperous economy. Wind power is rapidly developing, aiming at reversing the direction in the cables to the mainland in coming years. In December 2011 wind power accounted for 31.48% of Åland's total electricity usage.

Mariehamn was the base for the last large oceanic commercial sailing ships in the world. Their final tasks were bringing Australian wheat to Great Britain, on which Åland shipowner Gustav Erikson kept going until after WW2, 1947 being his last year. The ships latterly made only one round-trip from South Australia to Britain per year, (the grain race), after each marathon voyage going back to Mariehamn to lay up for a few months. The ship Pommern, now a museum in Mariehamn, was one of these last vessels.

The abolition of tax-free sales on ferry boats travelling between destinations within the European Union made Finland demand an exception for the Åland Islands on EU's VAT rules. The exception allows for maintained tax-free sales on the ferries between Sweden and Finland (provided they stop at Mariehamn or Långnäs) and at the airport, but has also made Åland a different tax-zone, meaning that tariffs must be levied on goods brought to the islands.

The Finnish State collects taxes, duties and fees also in Åland. In return, the Finnish Government places a sum of money at the disposal of the Åland Parliament. The sum is 0.45 per cent of total Government income, excluding Government loans. If the sum paid to the Finnish state exceedes 0.5 per cent, then any amount above that will go back to the Parliament of Åland as "diligence money".[13] In 2010, the amount of taxes paid by Åland Islanders was 0.65 per cent of the total taxes paid in Finland.[14]

According to Eurostat, in 2006 Åland was the 20th wealthiest of the EU's 268 regions, and the wealthiest in Finland, with a GDP per inhabitant 47 percent above the EU mean.[15][16]

While the official currency is the Euro, the Swedish krona is unofficially accepted by most businesses in Åland.[17]

Most inhabitants speak Swedish (the sole official language) as their first language: 90.2% in 2009, while 5.0% spoke Finnish. The language of instruction in publicly financed schools is Swedish (In the rest of Finland, bilingual municipalities provide schooling both in Finnish and in Swedish). (See Åland Swedish for information about the dialect.)

Regional citizenship or the right of domicile (hembygdsrätt) is a prerequisite for the right to vote or stand as a candidate in elections to the Legislative Assembly, to own and hold real estate situated in unplanned areas of Åland.